101-ICT Mentorship Core Content - Month 10 - Index Futures - Projected Range and Objectives

Last modified by Drunk Monkey on 2022-10-26 08:53
1 00:00:00,539 --> 00:00:08,369 ICT: Welcome back, folks, again is a discussion about commodities. So take a moment to read this disclaimer. As a reminder, I'm not a CTA and a licensed
2 00:00:08,369 --> 00:00:22,769 commodity trade adviser. Everything that's mentioned here should be viewed in light of a paper trade only. Okay, folks, June 2017, it mentorship index trading
3 00:00:22,769 --> 00:00:26,549 concepts, lesson four, projected range and objectives.
4 00:00:33,210 --> 00:00:45,150 Okay, before I get into it, just wanna remind you that index trading can be like anything else overcomplicated, or it can be simplified and the conversations
5 00:00:45,150 --> 00:00:57,300 that we're going to have here, I want you to understand that this is how I interpreted for the last 20 plus years, the internal movements of how indices
6 00:00:57,660 --> 00:01:10,110 operate and how they operate on a day by day basis, intraday. There's going to be some deviations from these ideas that obviously will not help us in any way
7 00:01:10,110 --> 00:01:21,750 shape or form. But these are my general classifications or how I interpret how the daily range should fulfill for industry indices in index trading. The first
8 00:01:21,750 --> 00:01:35,850 is to session up close. And view is typically with the daily and for our institutional order flow should be bullish. The morning trend or the am session,
9 00:01:36,510 --> 00:01:52,380 typically we'll see a return to a discount array, and then price will rally. The lunch hour consolidates with shallow retracements. And the pm trend runs the
10 00:01:52,380 --> 00:02:04,890 lunch hour Lowe's sell stops, or drops into a fair value discount array then rallies into the clothes. Now a little bit about this specific projected range,
11 00:02:06,000 --> 00:02:17,550 the daily range could actually go straight through the lunch hour, with very little consolidation whatsoever. dependent on what was the catalyst that sent
12 00:02:17,550 --> 00:02:29,640 prices higher, it could be a very strong economic or surprise to economic news that was released early on. And while we're looking for basically a measured
13 00:02:29,640 --> 00:02:40,500 move type event, first leg up in the morning consolidation in the second leg of equal distance seen from the am session seen in the A afternoon session. Don't
14 00:02:40,500 --> 00:02:50,640 be lulled into thinking that if it's a strong bull day, that it will consolidate always the entire lunch hour and many times it can just continuously trade
15 00:02:50,640 --> 00:03:00,180 higher through the lunch hour I'm just giving you a general kind of like a generic view of how I interpret the price action, how I forecast it, how I think
16 00:03:00,180 --> 00:03:09,090 it may unfold. Obviously, nothing's guaranteed Nothing's set in stone. But by far and large, these eight ways of projecting the range that I'm gonna show you
17 00:03:09,090 --> 00:03:23,400 in this teaching will pretty much fit the bill in most days okay to session down closed, just as the opposite of what we just shown, institutional order flow
18 00:03:23,400 --> 00:03:35,460 will be bearish on daily and or four hour chart and trend will return to a premium array then declines. The lunch hour consolidates with the shallow
19 00:03:35,460 --> 00:03:50,040 retracements in the pm Trin runs the lunch hour highs for buy stops or rises into a fair value premium array then declines into the clothes much like we just
20 00:03:50,040 --> 00:04:00,540 said as it relates to strong up days, the lunch hour may not see the entire lunch hour consolidate it can actually trade through the lunch hour going lower
21 00:04:01,050 --> 00:04:11,490 dependent on again whatever the stimulus was that set the day off it could be a very strong economic news was expected to come out and disappointed the number
22 00:04:11,490 --> 00:04:19,740 was a disappointment and it could have been a strong disappointment. So therefore the market is going to discount current levels and just rapidly
23 00:04:19,740 --> 00:04:31,890 reprice lower the the impact of seeing these types of days obviously this is like a trending day. You want to be focusing on a daily in for our our bearish
24 00:04:32,310 --> 00:04:47,370 and opposite seen with up to session up close days. You want to see when the daily and four hour is institutionally bullish. If we are in the middle of a
25 00:04:47,490 --> 00:04:57,690 intermediate term or long term, price swing based on what we would see on the higher timeframe chart. This is the classic scenario. Now when we start
26 00:04:57,690 --> 00:05:07,890 approaching higher timeframe, four hour and daily In opposing arrays. In this instance, here, we would be looking forward to session down close, or basically
27 00:05:07,890 --> 00:05:11,700 a big down day. That down close
28 00:05:13,559 --> 00:05:24,239 is high probability until we get to a four hour or a daily or weekly discount array. So when I start trading into those levels, obviously the same thing and
29 00:05:24,239 --> 00:05:36,989 said in opposite terms for the two sessions up close, if we're trading in the middle of a swing or intermediate term pricing has yet to complete and we have
30 00:05:36,989 --> 00:05:48,359 not traded up until for our daily premium array. That scenario should unfold for a two session up close day for two session down closed day. This is the criteria
31 00:05:48,359 --> 00:06:02,729 we're looking for as long as the four hour and or daily discount arrays have not been traded to. So it makes it very easy for price to expand lower. Okay, now we
32 00:06:02,729 --> 00:06:16,169 have a m rally pm reversal. institutional order flow is bullish, and this is seen on daily and four hour but it's underneath for instance a for our higher
33 00:06:16,169 --> 00:06:28,889 timeframe premium PD array. So in other words price has been going up it's yet to fulfill a completion completion of a bullish run. But very close to where we
34 00:06:28,889 --> 00:06:39,329 are presently, there is a higher timeframe premium PD array and it could be seen on a four hour or could be a daily but the am session will start off bullish
35 00:06:39,839 --> 00:06:53,129 until it hits the higher timeframe premium PD array, which causes the intraday market reversal. The am trend returns to a discount array then rallies. The
36 00:06:53,129 --> 00:07:07,499 lunch hour consolidates with shallow retracements the pm trend runs the lunch hour highs then reverses into the close or it runs the intraday high, then
37 00:07:07,499 --> 00:07:21,029 reverses into the close. So it could create a higher high in the pm session that was seen on the intraday or it could just simply run above the lunchtime hour
38 00:07:21,749 --> 00:07:30,719 and then reverse there so in other words, it could create a lower high that was formed in the New York am session. So don't think that it has to create like as
39 00:07:30,719 --> 00:07:38,279 his diagram showing here, a higher high and pm session relative to the am session it could just be a higher high relative to what was seen during the
40 00:07:38,279 --> 00:07:54,209 lunch hour, which would create a failure swing on the run into the am sessions high. And the pm trend can resume higher if the am session discount array that
41 00:07:54,239 --> 00:08:04,709 it rally off of equals a higher timeframe discount array. So we could see it recapitalized that same level once it trades down to it in the pm session. They
42 00:08:04,709 --> 00:08:16,499 can recapitalize that that discount array and send it higher. If there is no higher timeframe discount array, that's assault price rally away in AM, say for
43 00:08:16,499 --> 00:08:27,479 instance, maybe it was a 60 minutes, okay or a 15 minute discount rate that cause the am session rally, then obviously we could look for price to continue
44 00:08:27,479 --> 00:08:40,769 lower. But if that New York am session, discount array happened to be a four hour or a daily or a weekly discount array, or say for instance, an order block
45 00:08:40,799 --> 00:08:50,699 that's bullish from a higher timeframe. If it trades back down to in the pm session, it could reverse there and trade higher and resume going higher. The
46 00:08:50,699 --> 00:09:06,899 filter is if it's not a four hour or daily or higher than that discount array expected to trade through and go lower. Okay, the am decline pm reversal.
47 00:09:08,489 --> 00:09:17,939 institutional order flow is going to be bearish but it's yet to trade down into a discount PDA array on a higher timeframe. So prices above a higher Time Frame
48 00:09:17,939 --> 00:09:32,879 discount array from a four hour or a daily basis or even higher. Am trend returns to a premium array then declines. The lunch hour consolidates with
49 00:09:32,909 --> 00:09:47,969 shallow retracements the pm trend runs the lunch hour lows then reverses into the close or it runs the intraday lows then reverses into the close. So again,
50 00:09:47,969 --> 00:10:00,839 like we just said with the am rally pm reversal. This day we can see the lunch hour lows can be violated and traded down right off the sell side For any short
51 00:10:00,839 --> 00:10:10,139 term that was created during the lunch hour, and then rallies in the pm session or the pm session as shown here it runs out the low formed in New York am
52 00:10:10,139 --> 00:10:12,749 session then reverses and trades higher.
53 00:10:15,690 --> 00:10:25,950 The pm trend can resume lower if am session premium array equals a higher timeframe premium array. So everything we just mentioned for a am rally pm
54 00:10:25,950 --> 00:10:37,590 reversal in relationship to what the higher timeframe array may be if the am session premium array that it trades up to and sells off from, if that equals a
55 00:10:37,920 --> 00:10:47,040 higher timeframe for our daily weekly or monthly premium array, it can be returning back to in the pm session to recapitalize that same level and then go
56 00:10:47,100 --> 00:10:57,630 lower and resume lower. If that's not the case, and we don't see that higher timeframe for our daily or higher premium array that the New York am session key
57 00:10:57,630 --> 00:11:04,260 off of before drop down, then we can expect price to continue through and make an attempt or on higher
58 00:11:09,300 --> 00:11:20,370 consolidation am rally pm decline. institutional order flow is going to be neutral or it's going to be unclear to you. So if you're ever questioning what
59 00:11:20,370 --> 00:11:30,870 the institutional order flow is for a particular market day, and it's not obvious in terms of where we're at relative to premium or discount on daily or
60 00:11:30,870 --> 00:11:40,170 for our chances are we could probably see a scenario like this especially if there's no real high impact or medium impact news expected during the 10 o'clock
61 00:11:40,170 --> 00:11:53,940 hour or later in the day in the afternoon. So if there's a vacuum of any real market drivers, you can expect a particular projected range to unfold am trend
62 00:11:54,720 --> 00:12:07,170 is going to be seen by returning to a discount array then price rallies or after the first hour or the opening range or expands higher from equilibrium to run
63 00:12:07,170 --> 00:12:21,480 London buy stops or it could be intraday highs for the buy stops. At the time of this recording, this is the actual project the range I used for the June 22 2017
64 00:12:22,950 --> 00:12:36,480 trading day for the Spoos market where I sold short at 2437. And look for the price to trade down into a discount array or reach for sell stocks below the
65 00:12:36,480 --> 00:12:48,510 marketplace. So this is the actual projected range I used for a live trade example. So you can see how I formulated the idea and used it in a real time.
66 00:12:48,960 --> 00:13:04,560 Example today for your learning. The lunch hour consolidates with shallow retracements pm trend runs the lunch hour highs then reaches for the day's sell
67 00:13:04,560 --> 00:13:17,010 stops and today sell stops or it runs the intraday high then reaches for intraday or London sell stops. Now, obviously, what's the criteria? How do we
68 00:13:17,010 --> 00:13:27,060 know which one it's going to do indoors is it going to just run the lunch hour highs or is it going to run the intraday high that depends on which is a premium
69 00:13:27,090 --> 00:13:36,060 array. In other words, if there's a higher timeframe premium array that am session hit, then it's likely that it won't go back up there because they've
70 00:13:36,060 --> 00:13:46,650 already defended that level and it may just want to run the lunchtime hour highs. Now if the am session has not traded up into a higher timeframe premium
71 00:13:46,650 --> 00:13:59,190 array like an hourly or a four hour chart, premium array then the afternoon could run the intraday high and then reverse the pm trend can simply consolidate
72 00:13:59,220 --> 00:14:06,840 into the clothes after the lunch hour as well. So it can make all the movement in the morning and then just fizzle out and go sideways the rest of the day
73 00:14:07,020 --> 00:14:19,920 through lunch and into the clothes consolidation am declined pm rally is just the opposite of what we just saw. instance your order flow game will be neutral
74 00:14:19,920 --> 00:14:31,950 or uncertainty. The am trend will see price return to a premium array then decline or after the first hour of trading or the opening range. Price will
75 00:14:31,950 --> 00:14:46,830 expand lower from equilibrium to run London self stops the lunch hour is going to see consolidation with shallow retracements. The pm trend will see price run
76 00:14:46,830 --> 00:15:00,960 the lunchtime lows, then reach for the days by stops or runs the intraday low, then reaches for it intraday or London by stops. Now Again, as I mentioned in
77 00:15:00,960 --> 00:15:12,480 the previous slide, what what would scenario would you expect, which one would you look for for the pm train, if the am session blow trades down to a higher
78 00:15:12,480 --> 00:15:26,400 timeframe discount array, then the New York pm session will only look to run out the London lunch low. If the am session blow in this case, does not trade down
79 00:15:27,270 --> 00:15:37,140 into a higher timeframe discount array, then the New York pm session will look to run out the intraday low and then rally.
80 00:15:39,540 --> 00:15:49,230 pm trend can simply consolidate into the close after lunch hour as well just like we said in the previous slide for consolidation am rally pm decline. Now
81 00:15:49,230 --> 00:15:58,380 when we're looking at this particular day right here, when the markets not predisposed to trade higher, with a trend or lower with a trend, this is the
82 00:15:58,380 --> 00:16:07,980 classic scenario where you see that tug of war back and forth. This is what you'll see a lot of times in index trading, which makes it very frustrating if
83 00:16:07,980 --> 00:16:15,900 you don't understand the mechanics behind it. When there's a strong directional bias behind the marketplace are the underlying pinnings of the market suggest
84 00:16:15,900 --> 00:16:26,670 higher prices or lower prices do not look for this particular scenario. Okay, this is not seeking destroy, it's simply consolidation. Now Non Farm Payroll
85 00:16:26,700 --> 00:16:38,220 there is seek and destroy conditions in s&p. But generally, this type of day will fulfill if there is a lack of trend and lack of news. So as you can see,
86 00:16:38,430 --> 00:16:47,490 there's only eight projected ranges that I use for the s&p and it makes it very simple to anticipate what it is that I should be seeing on respective sessions,
87 00:16:47,490 --> 00:16:57,780 the am session and the pm session. Now obviously, the lunchtime hour is the same, it's the same thing across all of them consolidation with shallow
88 00:16:57,780 --> 00:17:05,700 retracements. The only time that the lunch hour is different is when we see the trending days, the two sessions up close or two session down closed days,
89 00:17:05,940 --> 00:17:14,730 because lunch can actually be active during those days. But it's always going to be relative to what was seen as a catalyst that drove price higher or lower for
90 00:17:14,730 --> 00:17:23,010 this perspective days. So hopefully this has given you more insight as to how I interpret projected ranges and how we can look for objectives and price action
91 00:17:23,910 --> 00:17:33,150 using stops because that's what we understand the indices look for these seek stops and they want a higher timeframe can trend but on an intraday basis, you
92 00:17:33,150 --> 00:17:42,360 have to understand it's all about liquidity and where the stops are. It's a traders market. So therefore, they're going to hunt stops predominantly. And
93 00:17:42,360 --> 00:17:45,300 until the next lesson, I wish you good luck and good trading